How businesses approach Diversity, Equity, and Inclusion (DEI) in hiring can be confusing — both for the organizations and potential hires. At a time when unemployment has hit a 54-year low, many businesses are struggling to attract and retain workers. At the same time, a recent Supreme Court ruling has injected some confusion about the legality of some DEI practices in hiring.
What Is DEI in Hiring?
The Diversity, Equity, and Inclusion movement in the United States has roots in the 1960s civil rights movement and has grown to include religion, gender, country of origin, sexual orientation, and other identities. Breaking down the three terms further, DEI means:
- Diversity — Diversity in the workplace means there is a wide representation of individuals with varying experience, skills, education, and backgrounds (gender, age, race, etc.).
- Equity — This means that everyone applying for a job or at the workplace has equal access to opportunities and is held to the same standards.
- Inclusion — This translates to creating a welcoming workplace environment where workers feel empowered to participate equally, as well as a focus on accommodating those who may have been excluded in the past.
Why Some Employers Are Focusing on DEI in Hiring
DEI in hiring is something many businesses have been focusing on recently for a variety of reasons. Not only is treating everyone equally and building diverse teams the right thing to do, but there are also many benefits to focusing on DEI in hiring.
Improved Employee Performance
Workplaces that prioritize DEI have been statistically proven to be more productive. According to a study by McKinsey & Company, ethnically diverse companies are 35% more likely to produce financial returns that exceed their national industry medians. And companies in the top quartile for gender diversity are 15% more likely to produce financial returns that exceed their national industry medians.
Higher Employee Engagement
Diverse workplaces create teams with a wide range of knowledge and varying perspectives, which results in improved employee engagement. According to Deloitte, 83% of millennials claim they experience more workplace engagement when they believe their employer fosters an inclusive internal culture.
Improved Employee Retention
Businesses that focus on DEI have been proven to create more fulfilling working environments. According to research by Great Place to Work, these companies have 5.4 times higher employee retention rates.
Employer of Choice
In addition to keeping your best talent, hiring for DEI can help businesses attract top talent across a variety of industries. According to Glassdoor, 67% of job seekers view a diverse workplace as an essential factor when considering and evaluating job offers.
The Legal Dynamics of DEI in Hiring
In June 2023, the U.S. Supreme Court ruled that affirmative action at universities, where ethnicity and race were considered admission factors to create more diverse student bodies, was unconstitutional under the Equal Protection Clause of the 14th Amendment.
This ruling has created confusion among some U.S. businesses about whether certain hiring practices could lead to regulatory issues or costly litigation. Specifically, when employers are focusing on creating “more diverse workplaces,” does this result in some type of reverse discrimination for certain groups?
Several lawsuits have already been filed testing this theory. For example, five former Gannett reporters filed a class action lawsuit last August in the U.S. District Court in Virginia, alleging they were let go from their positions in favor of less qualified minority candidates in response to the company’s DEI initiatives.
While some experts argue that the recent Supreme Court decision doesn’t directly impact hiring, it could open the door for further scrutiny in the hiring process. Others argue that the decision is narrow enough that it only affects public higher education and not private employment.
For example, employers cannot use collected data to give marginalized groups an advantage over other job candidates. However, they can stipulate that each stage of the hiring process be composed of a minimum percentage of qualified minority candidates before proceeding (a practice known as the Mansfield Rule).
While workplace decisions based solely on race or gender remain illegal, there’s nothing preventing employers from trying to address bias in their hiring processes, which is proven to produce a more diverse and inclusive workforce.
FAQs
Are DEI Hiring Practices Legal?
Yes, as long as they are not confused with affirmative action, which provides preferential treatment through legally mandated actions. In fact, California banned affirmative action in 1996 in public universities while still boosting diversity.
Is DEI a Legal Requirement for Employers?
There are no federal laws specifically related to DEI initiatives. However, individual states might pass legislation that either strengthens or weakens these corporate programs. It’s up to employers to track these regulations so they can tailor their response.
Can an Employer Consider Race in Hiring as Part of a DEI Program?
No. According to Title VII of the Civil Rights Act, it is unlawful for an employer to consider any single job candidate’s or employee’s race in an employment decision, even with the intention of creating a more diverse or equitable workplace.
What federal and state laws prohibit discrimination in the workplace?
The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws prohibiting discrimination in the workplace. Some of these laws include Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Equal Pay Act (EPA). California’s Fair Employment and Housing Act (FEHA) protects employees from discrimination based on certain protected characteristics.
What Are Unfair Hiring Practices?
Unfair hiring practices could result in legal consequences for a business. Some examples include discrimination based on protected characteristics, unconscious bias, nepotism, and unfair testing or screening.
Can You Sue for Unfair Hiring Practices?
Yes, you can pursue legal action if you believe an employer has engaged in unfair hiring practices. You can file a formal complaint with the EEOC and possibly pursue a civil case against the employer.
Contact an Employment Law Attorney in San Diego
Employers are required by law to be legal and fair when navigating the hiring process. Discriminating against a person due to gender, age, race, religion, disability, or other protected factors isn’t legal and can lead to legal consequences.
If you have questions about your rights under DEI or believe you have been discriminated against in the workplace, our San Diego employment law attorneys can provide assistance. For help, contact Gomez Trial Lawyers today for a free consultation by calling 866-TRIAL LAW (866-874-2552) or by contacting us online.